Japan Inc faces once again the “unpredictable” Covid.

Covid In Japan: Japan had an enviable record in its response to Covid.

Tokyo:

Japanese companies are temporarily closing offices or suspending production as they battle a record wave of COVID-19, disrupting operations in a country that has so far weathered the pandemic better than most advanced economies.

Automakers Toyota Motor Corp and Daihatsu Motor Co last week disrupted production line shifts due to employee infections. KFC Holdings Japan Ltd had to close some fast-food restaurants and move staff to fill gaps, while Japan Post Holdings Co temporarily closed more than 200 shipping centers.

Japan’s Covid case count has surpassed that of other countries as the full impact of the BA.4 and BA.5 variants that dominate around the world hits home. Japan has had more than 1.4 million new cases of COVID in the past week, data from the World Health Organization showed.

Companies are struggling to make it.

“We split mealtimes into different time slots and told workers to sit in one direction and not talk at all,” Subaru Corp CFO Katsuyuki Mizuma recently told reporters, describing how the automaker was looking. to fend off infections and work stoppages.

Newly diagnosed COVID cases hit an all-time high for Japan of nearly 250,000 on Wednesday. Hospitalizations and deaths are also on the rise, but not as dramatically as in previous waves due to the prevalence of vaccinations and booster shots.

Japan has had an enviable record in its response to Covid, avoiding the disruptive blockades and the large number of victims that accompanied the pandemic elsewhere.

The country of 125.8 million has had more than 32,000 deaths, a fraction of the tolls in the United States and Britain, for example.

The latest outbreak will likely show whether it is able to maintain its flexible response to “live with the crown” and limit the economic impact, particularly if the disruption now felt worsens over an extended period.

“There is still a shortage of semiconductors and the spread of the coronavirus is currently on the rise,” a Toyota spokesperson said last week.

“The future remains unpredictable”.

Health authorities advise that those who test positive should quarantine for 10 days and that their close contacts should isolate themselves for at least five.

Toshihiro Nagahama, chief economist at Dai-ichi Life Group, said manufacturing and retail will experience some pain as infected people and their close contacts stay at home.

“With the increase in infections and close contacts, this will certainly weigh on people’s confidence in going out to eat, shop and the like,” he said.

supply chains

The disruption has particularly important implications for a labor market at its tightest in decades, particularly for the small and medium-sized enterprises that make up the bulk of Japanese companies.

Yoshiaki Katsuda, an occupational health expert at Kansai University of Social Welfare, said large companies can hire temporary workers to replace those who need to take a break, but are still vulnerable to supply chain headaches.

“If the smaller companies that supply products … have to shut down for a long time, the production of the larger companies could be affected,” he said.

The wave of infections is also growling on transportation.

Rail operator Kyushu Railway Co suspended 120 rail services in southern Japan last week when 53 crew members tested positive or where close cases were contacted. Mitsui OSK Lines Ltd canceled four ferry crossings in western Japan and bus operator OdakyuBus Co Ltd cut dozens of routes around Tokyo.

The central government has devolved authority on infection control to prefecture governments, allowing them to step up precautions as they see fit. Twelve prefectures have enacted measures focused on reducing risks for the elderly.

Support for Prime Minister Fumio Kishida said in recent polls with the rise of COVID, but a strong demonstration for the ruling Liberal Democratic Party in last month’s elections gave him some breathing room, said Tetsuya Inoue, researcher. senior of the Nomura Research Institute.

“For the moment, Kishida and his administration are prioritizing maintaining economic activity rather than returning to very strict measures against COVID,” Inoue said.

Inoue said that whatever the brake on the national economy caused by the wave of infections, the biggest problem for Japan has been the blockages in China and the knock-on effects they have on supply chains.

Aid for Japanese companies and the economy in general may be in the offing. Health experts predict that this wave of infection will peak earlier this month.

“Given current trends, infections are unlikely to continue to expand in the long term and there is no need to impose severe behavioral restrictions,” Tokyo Foundation for Policy Research doctors wrote in a recent paper.